Seán Sherlock (Cork East, Labour) | Oireachtas source

I thank Members for the very precise nature of the points raised in their brief contributions. I will endeavour to answer all the points but if I do not do so tonight, I hope they will indulge me to respond to them on Committee Stage when I will have comprehensive answers.

I thank the Senators for their valuable contributions to the debate on the Companies Bill 2012. I welcome the general expressions of support for the Bill. There were many positive contributions spanning across a range of issue in respect of the legislation, in particular with regard to the collaborative approach taken throughout the development of the Bill.

Senator White referred to the importance of ensuring awareness of the new legislation and providing education to the business community on the changes and new requirements. The Companies Registration Office, CRO, will have a particularly pivotal role to play in the implementation phase of the new Bill and considerable progress is already under way in this regard.

This includes company owners, formation agents, company secretarial software vendors and legal and accounting practitioners to name but a few that would be impacted by this reform in the corporate code. They have been identified and specific and relevant communications and updates in preparation for implementation will be targeted by the CRO to each of these groups. In particular, the CRO is working with representative bodies for major stakeholders, such as the accounting and auditing professional bodies, to ensure that clear and early information on this new code is available.

Senator White also referred to receivership and examinership. The Government is supportive of the examinership process and brought forward legislation last year to give more small companies access to it and try to save as many jobs as possible.

Senator Quinn raised concerns about the regulation of the title "accountant". In 2007 the Company Law Review Group, CLRG, recommended the regulation of this title in the interests of consumer protection. On foot of this the Department considered the matter and noted the views of the Office of the Director of Corporate Enforcement and the Competition Authority. The Competition Authority took the strong view that there was no clear public interest case that would warrant the legal protection of the term "accountant". The authority noted the statutory regulation of a title automatically creates barriers to entry and market rigidity that can have negative impacts for service users. Based on this consideration, the fact the title is not protected in the UK, with which we are closely associated in all matters relating to accounting, the lack of data quantifying the detriment to the consumer and the ongoing discussions of the EU professional qualifications directive, it was considered that the evidence does not support the regulation of the term "accountant". While it is clear that there is a benefit to consumers in knowing that professionals are fully qualified and hold appropriate levels of indemnity insurance, consideration must also be given to the potential for adverse consequences such as added cost to business, increased cost of regulation and compliance, barriers to entry and to competitiveness, inhibition of the market and a threat to the continuing existence of good practitioners that do not meet the new requirements.

The Government is also obliged to consider the principles of better regulation and the Competition Authority the issue specifically in light of the principles of necessity, proportionality and effectiveness. Under each of these headings the authority found that the proposal did not meet the requirements of better regulation. However, in light of the concerns expressed by the accounting bodies the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, has asked officials in our Department to undertake an assessment of the issues by consulting with key stakeholders such as professional bodies, consumer representatives, small business representatives, regulators, the Revenue Commissioners, the Companies Registration Office and other official bodies with an interest in this matter. Members of the Oireachtas have also met the Minister to discuss this issue.

Senators Quinn and Michael D'Arcy spoke of making life easier for small businesses. We all wholeheartedly support this and the Bill is intended to do exactly that. In terms of reducing administrative burdens the Bill will implement a number of reforms on red tape that will make it easier and cheaper to run a company in Ireland and this will make a real difference to our international competitiveness. The Bill will make company law more accessible for the end user and reduce the complexity of doing business with companies. The main savings will come from the ease of setting up a company, the written AGM, the streamlining of corporate governance procedures and reduced professional fees. For example, the provisions relating to examinership allow small private companies apply directly to the local Circuit Court, rather than the High Court.

Senator Bacik spoke of redundancy payments and they are now managed by the Department of Social Protection under the insolvency scheme. However, officials from my Department are working with that Department to find a solution in cases where employees are abandoned by a company that does not formally wind up. This work is ongoing and we all share the concerns raised here relating to the Paris bakery, though this issue goes beyond that business and applies on a wider scale.

Senator Bacik also raised the matter of the deeming provisions and it is correct that a private limited company will be a DAC during the transition period. It is also correct that such a company will be able to benefit from the new limited structure, even if it does not actively change to allow itself to be deemed at the end of the transition period. I hope that answers the question.

Senator Barrett expressed concern about companies not having a physical AGM. It is worth noting that a company can, of course, hold an AGM and there is no barrier to doing this. It is up to the company whether the AGM is in writing or in person and it is a private matter for the members of a private company.

Senator Cullinane referred to the financial crisis, as have other Senators, and asked what actions have been taken to deal with its effects. The drafting of the Companies Bill began before the financial crisis but it has not been a static process. The CLRG has produced 15 reports since 2000 and its recommendations are generally reflected in this Bill. Most recently action was immediately taken on foot of a recommendation that small companies be permitted to initiate examinership proceedings in the Circuit Court as a less costly way to facilitate small companies in difficulties. The Bill also incorporates the 2009 Act, which increased and clarified the powers of the Director of Corporate Enforcement and increased the disclosure requirements relating to loans made by companies to directors. These are just a few examples of how the Bill has been adapted to take account of current economic circumstances. I want it to be on the record of this House that the Irish Congress of Trade Unions, ICTU, was included in the deliberations of the CLRG. If a document is to be quoted verbatim on the record of this House I would like to know what it is. Perhaps it could be circulated to all of us.